When Paul Bischoff started giving away teddy bears during the
holidays as a gift with purchase, he never dreamed it would spark a
collection craze with customers. Twelve years later, people return
to his Earth Treasures jewelry store in Eatontown, New
Jersey, each year to get a bear, moose, snowman or other plush
toy-sometimes shelling out hundreds more on purchases to get the
next larger size. "[The promotion] brings customers into the
store. It makes them smile, and they even spend more to get a
bigger free gift," says Bischoff, 54. The plush promos start
with a $100 purchase and grow bigger at the $300, $700, $1,000 and
$1,500 spending levels.

Claire Rosenzweig, president of the Promotion Marketing
Association of America, says gift-with-purchase offerings can
drive sales, build your brand and make customers feel good about
shopping in your store. She offers these tips for great
gifting:

If you have an upscale image, choose a gift that reflects that
image.

Be sure you can satisfy demand for the product; otherwise the
offer could backfire.

Make sure the gift makes sense for your business.

Gwen Moran

Gwen Moran is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).